Temasek lifts India exposure to 8% as China share declines for third year

Singapore’s state investor Temasek Holdings, which recently picked up 10 per cent stake in Haldiram, has been consistently expanding its footprint in India while slowly withdrawing from China over the last three years amid growing geopolitical risks and economic headwinds.

India has become Temasek’s third-largest market, after Singapore (27 per cent)  and China (18 per cent), with its exposure to the country higher than the rest of Asia Pacific excluding the three (11 per cent), according to Temasek’s annual review.

The Americas (including USA) accounts for 24 per cent, and EMEA 12 per cent.

The US, India, and Europe were among the top destinations for new capital.

India accounted for 8 per cent, or  $26 billion, of Temasek Holdings’ $324 billion portfolio at the end of March, up from 7 per cent in FY24 and 6 per cent in FY23, according to the annual report.

In contrast, China’s share fell to 18 per cent from 19 per cent last year and 22 per cent in FY23, continuing a steady retreat.

Rohit Sipahimalani, chief investment officer, Temasek, said, “Our direct investments in markets like China, the US, and India contributed to the uplift in our net portfolio value over the year.

"The growth reflects both the impact of shifting macroeconomic conditions on asset prices and the long-term prospects of our investments aligned with structural tailwinds in these markets.”

“We will continue to actively invest in our key markets while also exploring new markets of scale that can add to our portfolio resilience.

"In an investment landscape where geopolitical uncertainties bring about volatility that can trigger sharp asset price movements, our T2030 strategy execution is laser-focused on constructing a resilient and well-diversified portfolio that can continue to deliver sustainable returns,” Sipahimalani said.

Temasek invested S$52 billion and divested S$42 billion globally during the financial year, resulting in a net deployment of S$10 billion — a reversal from the S$7 billion of net divestments the year before.

The rebalancing comes as Temasek pivots towards consumer-led and digitally enabled businesses in India, capitalising on rising income levels and urbanisation.

Its recent investments in India include a minority stakes in Lenskart and Rebel Foods, tapping into India’s fast-growing direct-to-consumer space.

The fund also built larger positions in private lenders such as Axis Bank, HDFC Bank, and Kotak Mahindra Bank.

It also acquired a post-year-end stake in Haldiram Snacks Food, India’s biggest packaged snacks company.

The firm invested $1 billion for 10 per cent stake in the company.

Temasek also backed SarvaGram, which offers financial and productivity tools to rural households, as part of its concessional capital deployment aligned with sustainability and inclusive growth.

While Temasek remains invested in Chinese tech giants like Tencent and Meituan, its allocation to China has been falling for three consecutive years.

The review cited persistent real estate drag, subdued inflation, and trade uncertainties as key challenges.

“We continued to increase our stakes in Indian companies that benefit from the country’s growing consumer market,” Temasek said.

“India remains a key focus, given its demographic advantages and consumption-driven growth story.”

Temasek’s early-stage investments, which account for about 5 per cent of its portfolio, include multiple India-linked startups, further underscoring the firm’s long-term confidence in the region.